Redwood Breaks Bridgeport, CT, Commercial Sale Record on a Price Per Unit Basis

[Benjamin Spiegel]

Investment Info:

Large multi-family (5+ units) commercial investment investment.

Purchase price: $1,345,000
Cash invested: $500,000
Sale price: $1,825,000

The sale now holds the Bridgeport, CT record for the highest price per unit in a sale at $228,125 per unit. The previous record in Bridgeport was held by 333 State St, a 67-unit mixed-use property, which sold for $202,985 per unit in 2021.
https://westfaironline.com/real-estate/bridgeport-mixed-use-property-breaks-record-for-price-per-unit-sale/

What made you interested in investing in this type of deal?

• Purchased directly from a mom-and-pop operator off-market
• Secured $1M credit union loan and raised $500K equity to close
• Existing owner had inflated expenses and below market rents
• In-place rents approximately 30% under market at purchase
• Expense ratio at least 10% above the norm

How did you find this deal and how did you negotiate it?

A long-term colleague and active local broker brought the pocket listing.

How did you finance this deal?

Loan from a Local Credit Union, Nutmeg State FCU.

How did you add value to the deal?

• 4 apartments renovated just 8 weeks post-closing after buying out existing leases
• $33K per unit renovation, achieving 27% ROI
• Legacy tenant rents increased 10-20%
• $148K capital investment generated 50-60% rental increases
• Professionalized property management added

What was the outcome?

• NOI increased 60% from $74K at purchase to $118K stabilized after ~7 mos.
• 3-year business plan goals achieved in under 12 months
• Listed for sale at 2026 projected price of $1.875M
• Accepted $1.825M cash offer from 1031 exchange buyer
• Closed sale in Oct. 2023 to secure long-term capital gains
• New Sales Record Set: $228K per unit sale price, the highest ever in Bridgeport CT
https://westfaironline.com/real-estate/bridgeport-mixed-use-property-breaks-record-for-price-per-unit-sale/

Lessons learned? Challenges?

Evicting two problematic tenants was a challenging process, even though we managed to remove them quickly.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Matt Cawley from National Mulitfamily.